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City of Peoria, Illinois Seeks Clear Substantiation from
Developer that Marriott Project will Begin Soon

By John Sharp, Journal Star, Peoria, Ill.McClatchy-Tribune Regional News

Aug. 23, 2011--PEORIA -- Time might be winding down on the long wait for progress on the public-private Downtown Marriott Hotel project.

City Manager Patrick Urich said Monday that developer Gary Matthews needs to show "some movement toward conclusion" of getting the project started "as quickly as possible."

His comments come more than eight months after a Dec. 31 deadline. That deadline, specified within the city's redevelopment agreement with Matthews, said the City Council "may cancel" it if the conditions had not been met, which means construction needed to be under way by now.

"In the discussions we've had with the developer, we have made it very clear that we need to see some movement toward conclusion," Urich said. "Clearly, at this point in time, it's as soon as possible. If not, we're moving into our budget season here soon and (the council's and city's) attention will be focused on the budget."

Mayor Jim Ardis agreed.

"Everyone, especially the developer, have worked very hard on this project for several years under extremely difficult circumstances," Ardis said in an email to the newspaper. "We still want this project to happen. With the other investments happening in and around Downtown, it's imperative that this project move forward ASAP. We're looking for clear substantiation from the developer that everything is in place to begin the project soon."

Matthews, who did not return a call for comment, has been working on building a $102 million two-pronged project: a renovation of the Hotel Pere Marquette into a 284-room, full service hotel and the construction of a 10-story, 117-room Marriott Courtyard next to it.

The hotel is expected to connect to the Peoria Civic Center via a skywalk.

The City Council approved the hotel project's financing in May 2010, endorsing $37 million in a taxpayer-backed bond repaid through money generated by new taxes from the project. With interest, the city will pay about $67 million on its bond through 2032, although a statewide historic tax credit authorized by Gov. Pat Quinn in June 2010 would reduce that amount.

Matthews, himself, is set to make $9 million in a developer's fee from the project.

The news about the Marriott project also comes as the city looks to expand and double the project costs associated with its Downtown Hospitality Improvement Zone to incorporate the Staybridge Inn & Suites, which wants to undergo a $2 million renovation. A public hearing into the request is set for Tuesday.

If the hotel is placed in the zone, it will be eligible for tax breaks because of tax-increment financing and additional revenue from a 1 percent sales and hotel tax.

Ed Croom, president of Janko Hospitality, which manages the Central Illinois Hotel Group -- of which Staybridge is a part -- said the hotel is looking to do a "four to six month" rehabilitation project. The nearly 11-year-old hotel is in need of upgrades to "bring it up to current market standards," Croom said.

The city wants to double the costs within the zone, from $6 million to $12 million. The zone currently incorporates all of Downtown's hotels.

Bobby Gray, a city economic development specialist, said that doubling accounts for expenses associated with the Staybridge project and "for other improvements of the district if they should become available."

"Generally, within these types of programs, just like in a TIF, we usually add a little more generally because we don't know what the costs will be," Gray said.

John Sharp can be reached at 686-3282 or jsharp@pjstar.com. Follow him on Twitter @JohnSharp99.

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(c)2011 Journal Star (Peoria, Ill.)

Visit Journal Star (Peoria, Ill.) at www.PJStar.com

Distributed by MCT Information Services NASDAQ:CHCO,NYSE:MAR,NASDAQ:MATW,



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